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A single mum’s financial reset can be just what you need to begin the process of getting back on your feet after a life-changing event such as bereavement, separation, or divorce. Of course, it can be a struggle, but it doesn’t have to be as hard as you think. From building an emergency fund to going through your budget and making cuts, here are some reliable suggestions.
Assess Your Income and Expenses
Taking back control of your finances always begins with understanding what you have and what you don’t. Before making any changes, assess your income against expenses by deducting outgoings from money coming in. Many newly single mums begin by speaking with divorce lawyers or accountants to get an understanding of financial responsibilities. However, you can start with a simple spreadsheet that tracks money, lists priorities, and highlights benefit income.
Build an Emergency Fund ASAP
Single mothers, or anyone for that matter, can greatly benefit from having backup financial resources to use after an emergency. An emergency can range from something benign, like a broken-down fridge, to home damage from a natural disaster. Either way, even needing £100 to fix something might as well be a million when you are barely scraping by. However, building an emergency fund can help cushion the blow of a disaster and reduce any upfront costs.
Debt Management Helps a Single Mum Financial Reset
Recent UK surveys suggest that up to 80% of single-parent homes can’t cover essential costs. However, you can take actionable steps to ease money worries, beginning with tackling debt head-on. Debt doesn’t have to be the monster at the door, and the worst thing you can do is ignore it. It can help to begin with the debts you can easily pay off, and work towards larger ones. It also helps to call creditors, who are usually more than happy to offer payment plans.
See Where You Can Cut Costs
Being on your own can be financially straining, and you may not be able to enjoy the lifestyle you once had when with a partner. However, you can use your transaction data to see where money is being drained and come up with a cost-cutting budget. For example, you don’t need a gym membership you don’t use, and most exercises can be done for free at home. If you are struggling, you can also use community resources such as food banks and Freecycle networks.
Create a New Financial Identity
Gaining financial independence as a single parent can be one of the biggest challenges you can face alone. However, you can emerge from it a changed person from a money point of view. A shift in mindset from surviving to thriving is one of the most powerful and comes with other advantages, such as knowing your self-worth. With extra funds available, it becomes possible to invest in yourself with education, find protection with insurance and even begin investments.
Summary
Assessing income against expenditure allows you to make the necessary changes for a single mum’s financial reset for greater stability. You can then also begin to manage debt little by little, and even make investments in yourself, overall family stability and even your future.